Drug wars

Temperatures outside Nomura bank in London climbed into the high summertime
registers as six biotech executives in dark suits filed into windowless rooms. The
men were immediately segregated into two groups and told they had two days to turn a
university spin-out into a billion dollar public company. Oh, and the two groups
were competing against each other in a biotech "wargame,"

By Megan Scudellari | November 1, 2008

Temperatures outside Nomura bank in London climbed into the high summertime
registers as six biotech executives in dark suits filed into windowless rooms. The
men were immediately segregated into two groups and told they had two days to turn a
university spin-out into a billion dollar public company. Oh, and the two groups
were competing against each other in a biotech "wargame," and would be observed and
analyzed by industry experts.

In one room, the executives from the United States took their seats: Bruce
Carter, CEO of Zymogenetics; Clive Meanwell, CEO of the Medicines Company; and Tim
Rink, retired CEO of Aurora Biosciences Corporation. Sequestered away in another
corner of the bank, their British counterparts congregated: Nigel Burns, Chairman of
Cell Medica; Eliot Forster, CEO of Solace Pharma; and Neill MacKenzie, co-founder of
Oxford BioMedica.

Sponsored by the Bioscience Futures Forum, a government-launched organization
run by industry leaders, the wargame was held July 14th and 15th in the hopes of
identifying why the UK biotech sector lags significantly behind its US counterpart.
"The UK biotech industry has never delivered a fully-integrated one-billion dollar
company," says Steve Chisnall, director of the wargame and chief operating officer
of Simulstrat, the strategy team from King's College London who designed and ran the
game.

Each team began with the same fictitious drug, a treatment for solid tumors
showing potent results in breast cancer. Differences began when the teams appealed
to venture capitalists from their own country for phase I funding. "The US team was
tackling it in a very ambitious, confident, and strategic way," recalls Chisnall.
"The UK team was more hesitant…. You didn't get the impression they really believed
they could deliver the drug." Though precise figures are not yet available, the US
received about double the investment of the UK team after both phase I and phase II
pitches, says Chisnall.

The challenge: make $1 billion on a fake drug.

The investment difference was so dramatic that the UK team accused organizers
of giving them different drug data from the Americans. "I had to stand up and say,
'I'm sorry. You're using the same data,'" recalls Chisnall. The difference was in
the pitches and the response of respective investors. At one point, fearing that
hesitant UK investors were holding the British team back, Chisnall and his team
allowed the British officers to appeal to US investors. But the results didn't
change.

At the beginning of the second day, each team learned its lead drug candidate
didn't fare well in phase II trials. "It's probably fair to say the US team was more
proactive in managing the impact of these bad results," says Chisnall. The US team
quickly prepared a statement and gave a press conference. "We said that trying to
cure breast cancer is difficult, results in animal studies were highly promising,
but this study design was flawed," says Meanwell, who played the chief financial
officer of the American team (chosen because he was the only one of the three who
knew how to use an Excel spreadsheet). The British team, who did not have time for a
press conference, presented its data later to its company's board. "Of course we
were worried about the reaction of board," says Forster, CFO of the British team.
"It was a significant step backward of potential value of company."

The game never went as far as phase IV, says Chisnall, "because we had
learned enough." The UK team wasn't going to become a billion dollar company; the US
team was.

Analysis of the game is ongoing and will be compiled into a handful of
recommendations delivered straight to government and industry heads. Early results
suggest the UK company's reduced development was the result of limited management
ambition, a restricted market for biotech products, and the failure of AIM, the
London Stock Exchange's market for growing companies, to support new biotechs.

"We took a vote at the end of the game," says Chisnall. "We said to everyone
there, 'Based on your experience in the last two days, do you think the future of
the UK biotech as a strategic sector is at risk?'". The overwhelming majority voted
yes.

Comments

Given a study size of 3 CEOs from each territory, one has to wonder if the results would hold up if more CEOs from each area were selected. Is this result an artifact of the chosen participants' style or are the British culturally trained to be less aggressive in commercialization?

1. Not the difference between the two countries, but the difference between the groups, if you insist that there is difference. \n2. We cannot get conclusions from one game. As a scientist, I believe in statistics.\n3. In reality, being successful means that everything has to be in the right place at right time. Nikola Tesla was one of the best inventors, but people made fun of him for years before his success. \n